Formal property valuations are undertaken under RICS guidance, known as The Red Book, and this sets out how the valuer must operate. This begins with identifying the client and sending out detailed Terms of Engagement. The valuer may not be acting for you personally; they may be appointed by your bank or may be representing a body of which you are part, such as a partnership or limited company. Therefore, the duty of care may not be due to you as an individual. One thing that will need to be considered is the occupation arrangements for the property.
The valuer will need to know who is actually in occupation of the property (including sub-letting) and details of that occupation. Many owners query this requirement, but it is absolutely essential when assessing value. Ideally any occupancy will be properly documented (often by a lease) and this will set out the rights of the parties, the rent and repairing obligations. Quite often agreements are homemade and do not cover the basics in enough detail. Sometimes there are no agreements in place at all. The valuer must then make assumptions as to the basis of occupation and the rights of the parties. This can hamper values where the property clearly has development potential or is required for owner occupation.
Under recent changes to tenancy legislation, the ability to end a residential tenancy has been severely hampered. In order to successfully end a tenancy, the landlord needs to show that they have dealt with various compliance issues, such as protecting the deposit and providing a gas safety certificate. Case law has shown that some actions cannot now be done retrospectively, which means landlords are not able to serve notice to terminate. Many let houses cannot now be valued at their vacant possession value, which may be detrimental to the owner.
For further information contact Graham Bowcock MRICS on 0161 941 4228